Mortgage rates were on the move once more, after having barely moved through January.
In the week ending 17 th February, 30-year fixed rates jumped by 23 basis points to 3.92%.30-year fixed rates had risen by 14 basis points to 3.69% in the week prior.As a result, 30-year fixed rates held above the 3% mark for a 14 th consecutive week.
Compared to this time last year, 30-year fixed rates were up by 111 basis points.30-year fixed rates were still down by 102 basis points, however, since November 2018’s last peak of 4.94%.
Economic Data from the Week It was a busy first half of the week, with key stats including wholesale inflation and retail sales figures.The stats supported the more hawkish FED stance on monetary policy.In January, the producer price index rose by a further 1.0% after having risen by 0.4% in December.
Retail sales jumped by 3.8% in January, reversing a 2.5% slide from December.
With the markets focused on the FED, the FOMC meeting minutes also drew attention on Wednesday.
While the minutes were less hawkish than expected, rate hikes are around the corner, supporting the pickup in mortgage rates.Inflation figures from the week prior also supported the jump in mortgage rates, with the U.S annual rate of inflation accelerating from 7.0% to 7.5% in January.
Freddie Mac Rates The weekly average rates for new mortgages as of 17 th February were quoted by Freddie Mac to be :
30-year fixed rates jumped by 23 basis points to 3.92% in the week.This time last year, rates had stood at 2.81%.The average fee remained unchanged at 0.8 points.
15-year fixed rates surged by 22 basis points to 3.15% in the week.Rates were up by 94 basis points from 2.21% a year ago.The average fee remained unchanged at 0.8 points.
5-year fixed rates increased by 18 basis point to 2.98%.
Rates were up by 21 basis points from 2.77% a year ago.The average fee remained unchanged at 0.3 points.
According to Freddie Mac,
Higher inflation and stronger than expected consumer spending drove mortgage rates higher in the week.
As rates and house prices rise, affordability has become a major hurdle for those looking to buy a home.
The further increase in consumer prices will place further constraints on potential home buyers.
Story continues Mortgage Bankers’ Association Rates For the week ending 11 th February, the rates were :
Average interest rates for 30-year fixed with conforming loan balances rose from 3.83% to 4.05%.Points increased from 0.40 to 0.45 (incl.origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA increased from 3.93% to 4.01%.
Points rose from 0.54 to 0.59 (incl.origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.62% to 3.81%.Points rose from 0.35 to 0.39 (incl.origination fee) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, fell by 5.4% in the week ending 11 th February.
The Index had slid by 8.1% in the previous week.
The Refinance Index slid by 9% from the previous week and was 54% lower than the same week one year ago.
In the week prior, the Index had fallen by 7%.
The refinance share of mortgage activity decreased from 56.2% to 52.8%.In the previous week, the share had declined from 57.3% to 56.2%
According to the MBA,
Mortgage rates rose across the board following the recent increase in Treasury yields.
A further pickup in inflationary pressure and market expectations of a more aggressive FED policy response have pushed yields higher.
The 30-year fixed rate saw the most marked weekly increase since March 2020.More significantly, the 30-year fixed rate hit 4% for the first time since 2019.
As a result of higher rates, refinance applications fell further, with the refinance share of applications at its lowest level since mid-2019.
The average loan size rose to $453,000, another record high.
For the week ahead Key U.S stats include prelim private sector PMI and U.S consumer confidence figures early in the week.
While the numbers will influence, geopolitics will also provide U.S Treasuries with direction in the week.The markets will be monitoring news updates on Russia and chatter from Capitol Hill.
This article was originally posted on FX Empire
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